Plenary,

Meeting date: Thursday, May 8, 2008

Official Report 760KB pdf

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First Minister's Question Time

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Engagements

I call Wendy Alexander. [Applause.] Order.

To ask the First Minister what engagements he has planned for the rest of the day. (S3F-740)

Later today I will have meetings to take forward the Government's programme for Scotland. I am looking forward to the first question. To coin a phrase, bring it on.

The First Minister has been a nationalist all his political life. I am giving him the opportunity to resolve this issue. Why will he not take it?

Let me acknowledge the progress that Wendy Alexander has made over the past week. She now accepts the right of this Parliament to decide the future, in terms of a constitutional referendum put to the people of Scotland. We also have the Duncan McNeil declaration on behalf of the entire Labour group:

"we will not vote down any referendum bill that comes into the Parliament."

So when we bring forward that bill—

When?

—knowing that the Labour Party will support it—

When?

As stated in our manifesto—in 2010. [Interruption.]

Order.

We will expect the support of every Labour member in the Parliament. Given the progress that Wendy Alexander has made in the past few days, who knows what side she will be campaigning on?

This is far too serious a matter to jest with. We believe that the uncertainty is damaging Scotland. I and my colleagues have therefore offered our support to bring the issue forward now. We believe that Scotland deserves a choice sooner rather than later. The First Minister tells us that more than 80 per cent of Scots want a referendum—so why are we still waiting?

If Wendy Alexander will allow us, I thought that we would stick to what was in the Scottish National Party's manifesto on pages 8 and 15. Week after week, Wendy Alexander comes here and demands that we stick to the SNP manifesto—she attacks us for not doing so. However, that is not working, because people love the progress that we are making on so many issues. Now she is telling us that we should not stick to the manifesto and the 2010 date. Does she not feel that her credibility on keeping manifesto promises is being somewhat damaged by the process?

I agree with Wendy Alexander that this is a serious process, which is why we are engaging with it in a serious way through the national conversation. However, it is impossible for anyone outside the Labour Party—and I think most people in it—to take the Labour Party seriously after the past few days.

I have no doubt that the judgment of history will be between those, such as me and my colleagues, who wanted to let the people speak and those who wanted delay in order to foment grievance—[Interruption.]

Order.

—and to fray the relationship, because they feared the result.

The uncertainty is damaging our country. Uncertainty costs jobs. Last night Iain McMillan of the Confederation of British Industry Scotland said that it was time to lance the boil.

I have offered Labour's support for an early referendum. The First Minister has spurned that offer. Why will he not bring the bill on?

I welcome the upsurge in support for a referendum from Iain McMillan and everyone else. I also noticed in The Scotsman on Friday a poll of 648 business people around Scotland, which found that a total of

"39 per cent were now more in favour of independence than 12 months ago"

and that

"57.5 per cent believe that the SNP was doing a good or excellent job in power"—

a majority of three to one. The business community of Scotland, looking at the SNP in action, is warming to independence just like the rest of the country.

As the national conversation proceeds, with the declared committed support of every Labour MSP—with the possible exception of Karen Gillon—we will bring forward the legislation. We will go into the referendum and Scotland will vote for independence and freedom.

I am not the problem. Labour is not the problem. The legislative timetable is not the problem. Even Nicola Sturgeon is not the problem this week. The First Minister is the problem when it comes to resolving this issue in the nation's interests.

The First Minister will make a statement next week on his programme for government. The question is simple. Will he bring forward a referendum bill in next year's legislative programme, which he will announce next week?

The answer is that we will stick to what was laid out in pages 8 and 15 of the SNP manifesto. I would not say that Wendy Alexander is the only problem that the Labour Party has, but after the past few days we can decide quite convincingly that she is not the answer.

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Prime Minister (Meetings)

The First Minister met regularly with the Rev Ian Paisley, who is now departing from office. He met regularly with Bertie Ahern, who has now departed from office.

To ask the First Minister when he will next meet the Prime Minister. (S3F-741)

I met the Prime Minister a week past Monday. He assured me that he intended to stay in office, but he gave no similar undertaking about the Labour leader in Scotland. Of course, I did my best to act as a peacemaker between the warring factions in the Labour Party.

George Robertson famously said that devolution would kill independence "stone dead". Well, Gordon Brown and Wendy Alexander are now doing their damnedest to warm up the corpse. Who would have thought that a Labour Prime Minister and a Scottish Labour leader would be the SNP's greatest allies in breaking up Britain? The future of Scotland in Britain may not matter to the Labour Party, but it matters to David Cameron and it matters to me and to those millions of people in Scotland who want devolution to work. The Labour Party may have abandoned them, but the Conservatives have not.

Does the First Minister accept that, whatever his views about his political opponents, a referendum on something as important as the constitutional future of Scotland—a country that we all love—cannot be allowed to become a vote on the unpopularity of Gordon Brown and Wendy Alexander? That is an unacceptably dangerous road to take.

Having laid out a process as well as a date of 2010 in our manifesto, by staying faithful to that we are not being tempted by narrow political advantage to take advantage of the unpopularity of Gordon Brown and Wendy Alexander. Of course, Annabel Goldie's comments have a great deal of sense given the disarray of the Labour Party, but there is an essential question that she should perhaps clarify. Does she accept the right of the Scottish people in a referendum to determine their constitutional future?

Questions are for the First Minister.

I am here to ask the questions, First Minister. Whatever turmoil has raged over the past four days, devolution is what we have and I am confident that it is what we shall continue to have.

Does the First Minister agree that the politics of grudge, gripe and grievance between his Government and Gordon Brown's Government is unattractive, unimpressive and negative? Does he agree that with the exciting prospect of a general election—yes, bring it on—the time has come to construct a new relationship between Scotland's two Governments? The Conservatives are committed to that. Is he?

I point out to Annabel Goldie that just two weeks ago, during the possible fuel disruption, which could have had extraordinarily damaging consequences for the Scottish economy, this Government worked together with the Westminster Government to mitigate and to take Scotland through that difficulty. We did the same during the foot-and-mouth outbreak and following the terrorist attack on Glasgow airport. We have demonstrated that, where necessity demands proper co-operation, we are able and willing to give it.

However, Annabel Goldie must accept that there are legitimate differing views on the constitutional future of Scotland. The Government will put forward its view on independence and freedom for the Scottish people. There are also issues of current political concern, such as the withdrawal of attendance allowance because the Parliament decided to pursue a policy of free personal care. I hope that when we pursue those issues at Westminster, as we must, and stand up for Scotland, we will have the support of every party in the chamber, and that our doing so will be regarded not as the politics of grudge and grievance but as the politics of Scotland.

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Cabinet (Meetings)

To ask the First Minister what issues will be discussed at the next meeting of the Cabinet. (S3F-742)

The next meeting of the Cabinet will discuss issues of importance to the people of Scotland.

Can the First Minister believe his luck? Over the past year, he has seen the Conservatives cosy up to him, backing his budget and supporting him in key votes. Through thick and thin, for better or for worse, they were his best friends—until this week, when the farcical floor show that passes for the modern-day Labour Party came into view, offering the First Minister on a silver tray the vote that he has spent his previous 30 years in politics trying to achieve. With Labour and Tories like that, does he think that life can get any better?

I do not know how much luck comes into politics, but I have heard it observed that the luckiest thing that happened to the SNP over the past year was Nicol Stephen's decision not to go into coalition with us.

With all this going on, will the First Minister guarantee to spend time on the serious issues that people face this week? What detailed steps has he taken to respond to the humanitarian disaster following the cyclone in Burma last weekend? What discussions has he had with the Scottish charities and agencies about co-ordinating their work, as happened after the Indian Ocean tsunami? Is he liaising with the Disasters Emergency Committee? Have any Government staff been seconded to assist? Has Scottish Water been able to help by offering supplies of bottled water to those with no fresh water, as it did after the tsunami? Has the Government any plans to set up a one-stop shop for individuals who wish to assist? Has he written to the Burmese Government to offer support? How much time has he had this week for the people of Burma?

We are taking forward the suggestions that Nicol Stephen makes, especially with the Disasters Emergency Committee. In our international policy, we have declared that the Government stands ready to help. This is a humanitarian disaster on a global scale. We will co-ordinate our work with that of the Disasters Emergency Committee. I will take forward every suggestion by all parties in the chamber to enable Scotland to come to the aid of people in distress internationally.

I will take a constituency question from Cathie Craigie.

The First Minister will be aware of the announcement by Barclaycard yesterday that it will enter into a consultation process on proposals to close the Goldfish operation in Cumbernauld, which provides employment for more than 900 skilled workers at a state-of-the-art facility that delivers banking-related services. I am sure that the First Minister appreciates the devastating effect that the announcement has had on the workforce and the problems that it will create in the economy of Cumbernauld and of Scotland as a whole. What action will the First Minister take to protect those jobs and to secure them in Cumbernauld?

I have spoken twice in recent weeks to the managing director of Barclaycard, because we realised the danger that its takeover of Goldfish earlier this year posed to the operation in Cumbernauld. Unfortunately for us, Barclaycard has spare capacity in its operation—it is a much larger operation than Goldfish was. As Cathie Craigie will know, it has announced a similar process at the Goldfish headquarters in London.

There are two good reasons for optimism for the workforce in Cumbernauld. First, as Cathie Craigie rightly said, we are talking about a skilled workforce in a purpose-built facility. We now have the opportunity to market that facility to other providers in Scotland. Secondly, as part of our negotiations with Barclaycard, we pointed to the substantial increase in employment at Barclays Wealth in a facility in Glasgow that was declared open last autumn. Indeed, I was at the opening. Barclaycard has agreed to see where it can intermatch its expanding employment in Glasgow and the skills of those who might be made redundant in Cumbernauld.

We will work extremely hard, using all our agencies, to find positions for the people who work in the Cumbernauld facility. I will be delighted, as Jim Mather will be, to meet Cathie Craigie on this constituency issue.

I will take a further constituency question from Stuart McMillan.

The First Minister will be aware that the Clyde marine pilots are involved in industrial action with Clydeport over a variety of issues, including safety concerns and a new contract that the pilots think is less than satisfactory. He may also be aware that Clydeport recently advertised in Poland for pilots, stating that

"previous experience of piloting would be advantageous".

In light of that, will the First Minister open a channel of discussion between Clydeport and the Clyde marine pilots? Until now, Clydeport has refused to answer numerous calls and letters, including a registered letter, from the Advisory, Conciliation and Arbitration Service, which is trying to facilitate talks.

Let us declare from the outset that we all wish that the two parties in the dispute would use the facilities of ACAS. I am familiar with some of the issues in the dispute because they were relevant to issues that arose in the fuel dispute of the past few weeks. Both parties—Clydeport and the union that represents the pilots—should use the offer and facilities of ACAS to come to terms and resolve the dispute, which could be obviously extremely damaging for free travel in the Clyde ports.

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Fuel Prices

To ask the First Minister what representations he has made to the Prime Minister about the impact of high fuel prices on the road haulage industry and the economy of Scotland in general. (S3F-747)

I wrote to the chancellor on 10 March asking him not to implement the planned increases in fuel duty and to introduce a fuel duty regulator and commission a study of road haulage costs in Britain in comparison with costs in the rest of Europe. A reply is still awaited.

I call again on the Westminster Government to introduce a fuel duty regulator, which would provide double protection for motorists and the road haulage industry. First, higher oil prices beyond budgetary forecasts would trigger an automatic freeze in fuel duty rates. Secondly, any extra cash that was raised from VAT on petrol or diesel as a result of the higher pump prices would go back into an equivalent cut in fuel duty.

A fuel duty regulator softens the blow of unexpected spikes in oil and fuel prices, and the proposal is well worth consideration. I saw an interview with the Prime Minister this morning in which he seemed to indicate that he understood people's concerns about the rising cost of so many things. The fuel duty regulator is a taxation measure that, in this new and more contrite atmosphere, the Prime Minister and his chancellor would do well to consider.

I welcome the First Minister's answer. Does he share my concern that increased fuel prices—particularly increases that result from additional taxation—are helping to fuel inflation? Will he deploy that argument in any future correspondence with the Prime Minister?

Yes, I will. With oil prices at $120 a barrel and vast oil revenues flowing from Scotland to the London Treasury, the irony for Scotland is that our economy, particularly in the peripheral parts of the country, is damaged severely by high fuel prices. It is extraordinary that a country that produces such massive revenues in oil and gas wealth should be subjected to such disadvantage at this time. We have given the Treasury a range of suggestions to mitigate the effects of the price rises. I hope that the Prime Minister and the chancellor will avail themselves of at least one of them.

The First Minister will be aware that fuel prices in the Highlands and Islands have long outstripped prices elsewhere in Scotland. In my constituency, where diesel is now approaching £1.40 per litre, the impact on not only businesses but every household is severe.

Will the First Minister therefore welcome the commitment that United Kingdom Treasury ministers have given to my colleague Alistair Carmichael to investigate why the cost of fuel in the Highlands and Islands remains much higher than the cost of fuel in the rest of the country? Will he tell the Prime Minister about his Government's support for such an investigation, which could include, if necessary, the involvement of the Office of Fair Trading? Subject to the findings of that investigation, will he press for urgent action to help bring fuel prices in Orkney and throughout the Highlands and Islands more in line with prices in other parts of Scotland?

I agree with all the points that the member makes, but there is one thing that I should caution him about. I remember the previous investigation that was commissioned along those lines, which did not, unfortunately, produce any governmental results. However, that is no reason for not trying again, so I support the member's request to lend my backing to such an investigation. It is clear that the Highlands and Islands area is among the most vulnerable areas in respect of transportation costs. Industries in those areas bear the heaviest burden of all.

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Scottish Futures Trust

To ask the First Minister, following the recent publication of the responses to the Scottish futures trust consultation, what the next step in the process will be. (S3F-759)

The responses to the Scottish futures trust consultation are currently being carefully considered. The Cabinet will take a decision on the next steps shortly, and an announcement will be made following that.

The Bank of Scotland has said:

"there is a clear danger that the Scottish Futures Trust could prove to be a more expensive method of delivery than we already have."

Accountants and others have confirmed that. The Convention of Scottish Local Authorities has said that the Scottish National Party does not have the necessary powers, and regeneration consultants are baffled as to why any private investor would get involved in the scheme.

In addition, Audit Scotland has said that it is not aware of any new school building programme, and has called on the Government to produce a financial strategy for how it intends to fund new schools.

When will the Government produce such a strategy? Will it initiate any new schools? Will it build 100 new schools by 2009 and another 150 by 2011, to match Labour's promise brick for brick, or is it the case, as ever, that talk is cheap and the lives and futures of our children are even cheaper?

Actually, Audit Scotland said that there had been no strategy in the Labour-Liberal Government to develop its school programme. That is why we have a strategy. Incidentally, of the 44 schools that we have signed off in our first year of government, which Maureen Watt mentioned earlier, it is an enormous pleasure to say that the building of no fewer than 14 of those new schools involved non-profit-distributing companies. [Interruption.]

Order.

I am sure that Andy Kerr welcomes that, just as I welcome the offer that was made in the consultation on the Scottish futures trust by Labour-led East Renfrewshire Council, which wants to pilot the scheme. That is the sort of co-operation with local government in Scotland that the concordat results in.

Among the many interesting submissions that have been made in the futures trust consultation, I noticed in particular one from Anderson Strathern, which is a well-regarded company that is deeply involved in private finance initiative and public-private partnership schemes, which are so beloved of Andy Kerr. It said:

"it is recognised that, in certain projects, the private sector have made profits at a level that was not anticipated by the public sector."

Those profits were certainly not anticipated by Andy Kerr when he was in government.

Will the First Minister ensure that, under the Scottish futures trust, there will be no repeat of what happened at Hairmyres hospital, which is in Andy Kerr's constituency? [Interruption.]

Order.

There, the PFI company put in £100 million in equity and got in return £89 million in dividends. In other words, we got one hospital for the price of two.

If Alex Neil and Anderson Strathern recognise what is happening, Andy Kerr will eventually recognise it, too. I am sure that Alex Neil and at least some Labour MSPs welcome the announcement that has been made on the biggest single investment in the history of the national health service in Scotland in its 60th anniversary year—I refer to the public finance for the new Southern general hospital. As I said to the Scottish Trades Union Congress, Nye Bevan will be cheering us on.

Can the First Minister confirm that, according to the plans that are set out in his consultation document, the futures trust that would build and own all the schools and hospitals is a private company?

Yes—it follows the NPD model, which is a substantial advance on the model that was supported by the Labour-Liberal Administration and which resulted in the concession of inflated profits by so many providers.

We must remember that the PPP model beloved of Labour and Liberal members was considered to be an improvement on the PFI model beloved of the Conservative party, which was even more expensive to the public purse in Scotland.

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Peak Oil

To ask the First Minister what the impact of peak oil will be on Scotland and what action the Scottish Government is taking to address the issue. (S3F-751)

On a global level, there has been considerable debate about whether peak oil has occurred. We should remember that significant reserves remain in the North Sea and that the Scottish oil and gas industry, which is of enormous economic importance to Scotland, will remain a vital sector of our economy for decades to come.

However, we are also clear that Scotland needs to make a transition to a low carbon economy, with an energy supply that is diverse and sustainable and which contributes to Scotland's wealth. The Scottish Government is determined to take a global lead in such a transition—the 80 per cent CO2 reduction target in the forthcoming climate change bill makes that clear. That is a challenging target, but I am sure that it will have the support of Patrick Harvie and his colleague.

The 80 per cent CO2 reduction target certainly has our support and we eagerly await the detail of the proposal. However, it addresses a different, although equally pressing, issue.

Last week, for the first time the Parliament agreed to a motion that acknowledged the reality of peak oil, which will have significant long-term economic and environmental consequences around the world. The First Minister mentioned North Sea oil, but I am sure that he is aware of recent figures that show that it is declining faster than ever—last year alone, it declined by 14 per cent.

Even if Wendy Alexander manages to deliver independence for Scotland, we face the prospect of becoming a net importer of oil when prices would be beyond the $200 a barrel mark.

Question, please.

Does the First Minister therefore agree that Scotland remains quite unprepared for the reality of peak oil? Will his Government take on the responsibility of returning to Parliament with a clear programme of action for steering a transition towards a low carbon economy that is fit for life after peak oil?

I must make a correction: Scotland produces more than 10 times its consumption of oil and gas, and will remain a net exporter for decades to come.

There is a strong argument that we might have passed the peak of North Sea oil and gas production, but we are certainly far less than halfway into the economic effects. When the price of oil is $120 a barrel, one does not have to be an economist to realise that we are nowhere near halfway into the economic impact. The challenge for us, of course, is to get more of the economic impact in terms of revenues for the Scottish people over the next 30 years than we have managed to get over the past 30 years.

Peak oil is a substantial issue, globally, so I know that Patrick Harvie will welcome initiatives such as the saltire prize, which is the world's largest single prize for offshore renewables generation. That initiative, which was launched last month in Washington, in conjunction with the National Geographic Society, shows that Scotland has had a major second win in the energy lottery when it comes to our renewables potential. Our marine renewables potential might account for 25 per cent of that for the whole of Europe.

That is the sort of ambitious plan that talks to the future of this nation. Let us hope that we manage to secure more of the benefits of our second win in the energy lottery than we did from our first win on oil and gas.

Despite the fact that 20 new fields came on line last year, overall our production has almost halved from its high in 1999. This year, the number of new field start-ups is set to be two rather than 20.

Does the First Minister agree that if exploration is not positively encouraged by both the Scottish and United Kingdom Governments, hydrocarbon production in the UK sector could come to an end much sooner than most people realise, causing great damage to our economy, especially in Aberdeen and the north-east?

I think that there will be significant quantities of oil and gas in the waters around Scotland for generations to come. However, I agree that calculated and systematic exploration incentives are extremely important, which is why I put them forward in a series of proposals for the budget two years ago. They would have cost a bare fraction of the additional taxation that the chancellor is raking in at the present moment.

As the member will know from his knowledge of north-east Scotland, it is a question not just of exploration incentives but of infrastructure incentives. For example, there are no plans for development of 20 gas fields that have been discovered off the west coast of Scotland because they need a shared infrastructure.

The investment incentives that are required need to be carefully targeted; they will cost a bare fraction of the increases in oil taxation. With those in mind and with a Government that is passionate about the industry and infrastructure of Scotland, we can be confident that the oil and gas revolution will continue in our country for decades to come.

Wind energy must be a part of meeting our future energy needs. Can the First Minister confirm that, in the first 12 months of his Administration, his ministers have approved major wind power developments with a combined capacity of under 600 megawatts, while they have rejected major wind power applications with a combined capacity of approaching 900 megawatts?

Lewis Macdonald did not mention that one of those rejections was of a single project in the Western Isles. We will shortly be celebrating a renewable energy capacity in Scotland of 3 gigawatts, which is far beyond our capacity in nuclear power, for example.

As we move forward, with applications already in for another 4 gigawatts, with the potential to produce perhaps five or even 10 times Scotland's electricity requirements from the renewables revolution that lies before us, I am sure that even Lewis Macdonald will conjure up some enthusiasm for participation in the saltire prize for marine renewables and that he will encourage the great technologists at the University of Aberdeen and the Robert Gordon University to move in for the prize as Scotland becomes the world centre of energy from offshore marine renewables—the energy of the future.

Meeting suspended until 14.15.

On resuming—